It has been the stuff of mafia underworld lore for years - that the FBI covertly used mafia muscle to help solve the 1964 disappearance of three civil rights volunteers in Mississippi.

But on Monday rumour became reality as a gangster's ex-girlfriend became the first witness to repeat the story in open court.

Linda Schiro described how she traveled with Gregory Scarpa to Mississippi, where he told her he had forced a Ku Klux Klan member to reveal the location of the volunteers' bodies by "putting a gun in the guy's mouth and threatening him."

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The FBI has never acknowledged that Scarpa, nicknamed "The Grim Reaper," was involved in the case.

The testimony came during the trial of former FBI agent R Lindley DeVecchio, who has pleaded not guilty to four counts of murder in what prosecutors have billed one of the worst law enforcement corruption cases in US history.

It is alleged Scarpa plied DeVecchio with cash, jewelry, liquor - and even prostitutes - in exchange for confidential information on suspected rivals in the late 1980s and early 1990s.

Until now, Schiro was too afraid to speak out about the illicit alliance, prosecutors say.

But she was coaxed into testifying about what went on behind the scenes with assurances authorities would protect her life.

Defence lawyers have sought to portray Schiro - who testified that prosecutors were paying her $2,200 a month for living expenses - as an opportunist who framed DeVecchio at the behest of overzealous prosecutors, and to improve her chances for a tell-all book deal about Scarpa, who died behind bars in 1994.

The notion that Scarpa strong-armed a Klan member into giving up information about one of the most notorious crimes of the civil rights era has been talked about in mob circles for years.

It happened during the search for suspects in the disappearance of civil rights workers James Chaney, Michael Schwerner and Andrew Goodman, who were beaten and shot by a gang of Klansmen and buried in an earthen dam.

The case was dramatized in the movie "Mississippi Burning."

Investigators struggled for answers in the early days of the case, stymied by stonewalling local Klan members.

The Daily News reported in 1994 that a frustrated J Edgar Hoover turned to Scarpa to beat the information out of local Klansmen.

Schiro recalled Monday how she and Scarpa walked into a hotel in Mississippi where the FBI had gathered during the investigation, and how the gangster winked at a group of agents.

She said an agent later showed up in their room and "handed Greg a gun."

Later, she said Scarpa helped find the volunteers' bodies by "putting a gun in the guy's mouth and threatening him."

She said an unidentified agent returned to the room, gave Scarpa a wad of cash, and took back the weapon.

Her remarks about the Mississippi episode were only a brief part of Schiro's full day of testimony, which is considered crucial for the case. She is scheduled to return on Tuesday.

Schiro, 62, started dating Scarpa at age 17 after meeting him in a bar. She spent most of her life with mobsters, so his boasts that he had been involved in 20 gangland murders did not frighten her, she said.

"I wasn't upset. I was impressed," she said.

She said she was more surprised when the Colombo crime family captain first told her about his ties to the FBI.

"I said, 'What do you mean, you're a rat?"' she recalled. "And he said, 'No, I just work for them.'"

After DeVecchio became the informant's "handler" in 1978, Schiro said she was allowed to sit in on weekly meetings at the couple's apartment.

She recounted that when Scarpa offered stolen jewelry to the agent, he "took it and put it in his pocket," she said.